U.S. INDUSTRIAL PRODUCTION FELL 11.2%

U.S. FRB - May 15, 2020 - Total industrial production fell 11.2 percent in April for its largest monthly drop in the 101-year history of the index, as the COVID-19 (coronavirus disease 2019) pandemic led many factories to slow or suspend operations throughout the month. Manufacturing output dropped 13.7 percent, its largest decline on record, as all major industries posted decreases. The output of motor vehicles and parts fell more than 70 percent; production elsewhere in manufacturing dropped 10.3 percent. The indexes for utilities and mining decreased 0.9 percent and 6.1 percent, respectively. At 92.6 percent of its 2012 average, the level of total industrial production was 15.0 percent lower in April than it was a year earlier. Capacity utilization for the industrial sector decreased 8.3 percentage points to 64.9 percent in April, a rate that is 14.9 percentage points below its long-run (1972–2019) average and 1.8 percentage points below its all-time (since 1967) low set in 2009.

Market Groups

All major market groups recorded decreases in production in April. The index for consumer goods fell 11.7 percent, with a drop of 36.0 percent for consumer durables, a decline of 3.3 percent for consumer energy products, and a decrease of 6.2 percent for consumer non-energy nondurables. The weakness in consumer durables was led by a drop of 61.9 percent in automotive products, while the decline in consumer energy products reflected a decrease in fuels that was partly offset by an increase in sales by utilities to residences. The production of business equipment decreased 17.3 percent, held down by a drop of 60.3 percent in transit equipment that resulted from essentially month-long closures of most factories producing motor vehicles and civilian aircraft. The indexes for construction supplies and business supplies declined 12.6 percent and 9.9 percent, respectively. The output of materials fell 9.9 percent, with a drop of 17.2 percent for durables and decreases of 7.2 percent and 5.1 percent for nondurables and energy, respectively.

Industry Groups

Manufacturing output dropped 13.7 percent in April. At 85.5 percent of its 2012 average, manufacturing production was at its lowest level since August 1997. The index for durable manufacturing fell 19.3 percent; among its components, the largest decline was posted by motor vehicles and parts. The shutdowns of most motor vehicle assembly plants led to light vehicle production at an annual rate of only 70,000 units, far below the assembly rate of 11.0 million units in February 2020. Among other durable goods industries, decreases of around 20 percent were recorded by primary metal products, by aerospace and miscellaneous transportation equipment, and by furniture and related products. The index for nondurables fell 8.2 percent, with declines of around 20 percent for textile and product mills, for apparel and leather, for printing and support, and for petroleum and coal products. The output of other manufacturing (publishing and logging) fell 10.4 percent.

The output of utilities weakened 0.9 percent in April, as a decrease for electric utilities was mostly offset by a gain for natural gas utilities that reflected strong demand for heating due to cold temperatures. Mining output fell 6.1 percent, with the largest decreases in crude oil extraction, in oil and gas well drilling, in coal mining, and in non-energy mining. The index for oil and gas well drilling fell 28 percent, its largest drop on record (since 1972).

Capacity utilization for manufacturing in April was 61.1 percent, 9.7 percentage points lower than in March and 2.6 percentage points below its recession trough of June 2009, the previous historical (since 1948) low for the measure. The operating rate for durable manufacturing also dropped below its 2009 low to 55.3 percent and was held down by decreases in every major industry group. Likewise, capacity utilization for nondurables set a new low, falling 6.1 percentage points to 68.0 percent.

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